In May, both personal income and disposable personal income rose 0.4 percent, while personal consumption expenditures (PCE) rose 0.2 percent, leading to a rise in the personal savings rate from 3.0 to 3.2 percent.

Consumer sentiment retreated in late June to just above the May reading largely due to concerns about the potential impact of tariffs on the domestic economy, although the falloff was minor. Consumers also anticipated an uptick in inflation during the year ahead, partly due to rising energy prices and partly due to tariffs.

Thursday, June 28, 2018

In the week ending June 23, initial unemployment claims were 227,000, an increase of 9,000 from the previous week's unrevised level of 218,000. The 4-week moving average was 222,000, an increase of 1,000 from the previous week's unrevised average of 221,000.

Americans' sentiment improved to the best level in two months on brighter views of the economy and personal finances. The Bloomberg Consumer Comfort Index rose for the third straight week to 57.3 from 56.5.

Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the first quarter of 2018 according to the "third" estimate released by the Bureau of Economic Analysis, down from 2.2 percent in the second estimate. The GDP estimate released today is based on more complete source data. In the fourth quarter, real GDP increased 2.9 percent.

Wednesday, June 27, 2018

Orders for durable goods fell 0.6% in May following a revised 1% decline in April, led by the biggest drop in new orders for cars and trucks since 2015. This is perhaps a sign that intensifying trade disputes between the Trump administration and other countries are causing businesses to hesitate.

The US trade deficit in goods narrowed for the third consecutive month in May to -$64.8 billion as improved export performance outweighed a modest rise in imports during the month. This is also the smallest deficit for the economy since last September.READ MORE

Pending home sales decreased 0.5 percent in May and have now fallen on an annualized basis for the fifth straight month. A larger decline in contract activity in the South offset gains in the Northeast, Midwest and West.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 6.4% annual gain in April, down from 6.5% in the previous month. Before seasonal adjustment, the National Index posted a month-over-month gain of 1.0% in April.

Tuesday, June 26, 2018

The Global Investor Confidence Index decreased to 101.7, down 2.1 points from May's revised reading of 103.8. Escalating trade tensions across the globe, increasing protectionism, and diverging monetary policy between the major central banks have coincided with more cautious investor positioning.

Consumer confidence declined in June by 2.4 points after improving in May. Consumers' assessment of present-day conditions was relatively unchanged, suggesting that the level of economic growth remains strong. The modest curtailment in optimism suggests that consumers do not foresee the economy gaining much momentum in the months ahead.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 6.4% annual gain in April, down from 6.5% in the previous month. Before seasonal adjustment, the National Index posted a month-over-month gain of 1.0% in April.READ MORE

Sales of new single-family houses in May 2018 were at a seasonally adjusted annual rate of 689,000. This is 6.7 percent above the revised April rate of 646,000 and is 14.1 percent above the May 2017 estimate of 604,000.

Friday, June 22, 2018

June data indicated that U.S. private sector firms experienced a strong end to the second quarter of 2018, driven by another robust contribution from service providers. In contrast, manufacturing production growth slowed for the second month running, to its weakest since September 2017.

Thursday, June 21, 2018

In the week ending June 16, initial unemployment claims were 218,000, a decrease of 3,000 from the previous week's revised level. The previous week's average was revised up by 750 from 224,250 to 225,000.READ MORE

Americans' expectations for the economy advanced for a second month in June to match the highest level since 2002, with the monthly gauge rising from 54.5 to 56. The weekly consumer comfort index rose to seven-week high of 56.5 from 55.8.

While May's 0.2 percent increase in the U.S. LEI was slower than in recent months, the improvements in a majority of its components offset the declines in leading indicators of labor markets and residential construction. The U.S. LEI still points to solid growth but the current trend, which is moderating, indicates that economic activity is not likely to accelerate.

Wednesday, June 20, 2018

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,350,000. This is 5.0 percent above the revised April estimate of 1,286,000 and is 20.3 percent above the May 2017
rate of 1,122,000.

Total existing-home sales decreased 0.4 percent to a seasonally adjusted annual rate of 5.43 million in May from downwardly revised 5.45 million in April. With last month's decline, sales are now 3.0 percent below a year ago and have fallen year-over-year for three straight months.

Tuesday, June 19, 2018

Builder confidence in the market for newly-built single-family homes fell two points to 68 in June, and was due in large part to sharply elevated lumber prices, adding nearly $9,000 to the price of a new single-family home since January 2017.The index measuring current sales conditions fell to 75, the component gauging expectations in the next six months dropped to 76, and the metric charting buyer traffic edged down to 50.READ MORE

Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,301,000. This is 4.6 percent below the revised April rate of 1,364,000, but is 8.0 percent above the May 2017 rate of 1,205,000.

Friday, June 15, 2018

Industrial production edged down 0.1 percent in May after rising 0.9 percent in April. At 107.3 percent of its 2012 average, total industrial production was 3.5 percent higher in May than it was a year earlier. Capacity utilization for the industrial sector decreased 0.2 percentage point in May to
77.9 percent, a rate that is 1.9 percentage points below its long-run (1972-2017) average.

Consumer sentiment rose slightly in early June to 99.3 due to consumers' more favorable assessments of their current financial situation and more favorable views of current buying conditions for household durables. The Expectations Index, in contrast, declined to its lowest level since the start of the year due to less favorable prospects for the overall economy. The sharpest divide was between the record number of households who mentioned recent income gains and the highest expected year-ahead inflation rate since 2015.

Thursday, June 14, 2018

In the week ending June 9, initial unemployment claims were 218,000, a decrease of 4,000 from the previous week's unrevised level of 222,000. The 4-week moving average was 224,250, a decrease of 1,250 from the previous week's unrevised average of 225,500.

Retail sales jumped 0.8 percent in May, or the biggest advance since November 2017, suggesting stronger growth for 2Q 2018. Data for April was revised up to show sales rising 0.4 percent instead of the previously reported 0.2 percent gain.

Wednesday, June 13, 2018

The Federal Reserve increased the target range for its benchmark interest rate by 0.25% to a range of 1.75%-2%, the highest since September 2008. In raising its benchmark interest rate, the Fed cited an economy that is growing at a "solid" rate and would likely include two more rate hikes in 2018.

In September of 2015, I wrote a column about the
introduction of a new product type to the home building marketplace: the single-family home for rent, otherwise
known as build-to-rent (B2R). At that
time, just a few builders including Lennar and Toll Brothers had dipped their
toes into these waters, but today it’s being seen as a clever hedge against the
boom-and-bust real estate cycles which can test even the best-run companies.

To be sure, it’s not just home builders getting into this
game. Wall Street-backed companies like Invitation Homes and AmericanHomes4Rent
started the trend by buying up cheap, existing single-family homes in
foreclosure back in 2012 when home prices were near their lowest, eventually
assembling a portfolio of 200,000 units across the country. Even with that rapid growth, their holdings
still represent just 1.4 percent of the estimated 14 million single-family rental
homes, with most owned by small, ‘Mom and Pop’ operators.

Today, with this business throwing off stable cash flow and maintaining
low vacancy rates, more builders are entering this space, with some focused
entirely on the B2R model.

According to
a recent NAHB analysis of Census Bureau data, during the 12 months ending with
the first quarter of 2018, there were 37,000 single-family homes started for
rent, up from 33,000 during the previous four quarters. Of this total, 7,000 were started in the
first quarter alone. While that annual market
share of 4.3 percent is down from the 5.8 percent share of five years ago, it’s
still significantly higher than the 2.7 percent average noted during the prior
20-year period of 1992-2012.

Not surprisingly, builders of new single-family homes for rent
also enjoy some significant advantages over the typical corporate model of offering
only existing homes. These benefits include fewer maintenance issues associated
with newly built units, the ability to standardize features and amenities
across a portfolio (and charge premiums for upgrades), and the higher
management efficiencies which come with concentrating multiple units in the
same location. Indeed, one of the most common complaints cited by tenants of
these corporate rental home behemoths is that their widely dispersed maintenance
operations depend on local contractors, often resulting in long delays for even
essential issues.

Like builders of homes for sale, rental home builders also have
divided product lines by quality of amenities and services.In some cases, such as when a builder of both
rental and for-sale homes include the two options scattered across the same
neighborhood, community amenities might be more basic with no on-site management.

In other cases, such as in a neighborhood of only homes for
rent, the leasing experience might be similar to that of a traditional for-sale
community, with several model homes from which to choose and full-time leasing
agents plus on-site maintenance and gardening services.For those renters wanting to experience the
benefits of a resort-style apartment community in a single-family home (and
willing to pay more), community amenities could also include pool and spa
areas, parks and gated entrances.

While it’s not easy to quantify the exact depth of demand
for single-family rentals, a combination of economic and demographic factors do
provide some considerable tailwinds for the foreseeable future.

On the economic side, high levels of student
loan debt and the challenges of saving for a down payment versus a tight job
market mean more young families are willing to test-drive living in
single-family neighborhoods.
According
to the American Community Survey, 56 percent of gains in the nation’s rental
housing stock between 2005 and 2015 were for single-family homes, while the
number of households living in all rental properties grew from 33 to 36 percent,
or more than an additional 544,000 per year.

On the demographic side, millennials are now increasingly
reaching milestones delayed by the Great Recession, with more moving back to
the suburbs they once avoided.While
partly due to bedroom count limitations in most apartments, it’s also due to
changing lifestyle preferences.In many
cases, although many younger renters in their 30s have sufficient incomes to
quality for mortgages, the ability to live in a single-family home without the
commitment of a purchase is steadily gaining popularity.

Joining these younger renters are baby boomers looking to
downsize not necessarily in space, but in the financial commitment required. By
renting the same type of single-family home product they once owned, they can
not only avoid spending down retirement savings into a down payment, but enjoy
the freedom associated with a more transient lifestyle.

The Small Business Optimism Index increased in May by three points to 107.8, to the second-highest level in the NFIB survey's 45-year history. Respondents reported high numbers in several key areas including compensation, profits, and sales trends.

The Producer Price Index for final demand rose 0.5 percent in May, seasonally adjusted. On an unadjusted basis, the final demand index moved up 3.1 percent for the 12 months ended in May, the largest 12-month increase since climbing 3.1 percent in January 2012.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in May on a seasonally adjusted basis after rising 0.2 percent in April. Over the last 12 months, the all items index rose 2.8 percent before seasonal adjustment.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in May on a seasonally adjusted basis after rising 0.2 percent in April. Over the last 12 months, the all items index rose 2.8 percent before seasonal adjustment.

Monday, June 11, 2018

The amount of equity in mortgaged real estate increased by $1 trillion in Q1 2018 from Q1 2017, an annual increase of 13.3 percent, and has more than doubled in five years. The nationwide negative equity share for Q1 2018 was 4.7 percent of all homes with a mortgage, more than 20 percentage points lower than the peak negative equity share - 26 percent - recorded in Q4 2009.

Thursday, June 7, 2018

In the week ending June 2, initial unemployment claims were 222,000, a decrease of 1,000 from the previous week's revised level. The 4-week moving average was 225,500, an increase of 2,750 from the previous week's revised average.

The U.S. trade deficit fell to a seven-month low in April, falling 2.1 percent from March to $46.2 billion. Exports rose to a record high, lifted by an increase in shipments of industrial materials and soybeans.READ MORE

Wednesday, June 6, 2018

The NMI® registered 58.6 percent, which is 1.8 percentage points higher than the April reading of 56.8 percent. There continue to be concerns about the uncertainty surrounding tariffs, trade agreements and the impact on cost of goods sold.

The May PMI® registered 58.7 percent, an increase of 1.4 percentage points from the April reading of 57.3 percent. Demand remains robust, but the nation's employment resources and supply chains continue to struggle. Respondents say price pressure at their companies is causing price-increase discussions.

Nonfarm business sector labor productivity increased 0.4 percent during the first quarter of 2018, as output increased 2.7 percent and hours worked increased 2.3 percent. From the first quarter of 2017 to the first quarter of 2018, productivity increased 1.3 percent, reflecting a 3.6-percent increase in output and a 2.3-percent increase in hours worked.

The Market Composite Index increased 4.1 percent on a seasonally adjusted basis from one week earlier, with both purchase loans and refinances up 4.0 percent. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.75 percent.

Tuesday, June 5, 2018

The number of open jobs in May rose by one percent from April to another series high of 6.7 million. This number exceeds the number of jobless by over 300,000. At the same time, hiring rose 1.7 percent to 5.6 million, and the quits rose 1.6 percent to 5.4 million.

Friday, June 1, 2018

April spending on new home construction rise by its highest amount in 24 years (+4.5%), and overall construction spending rose to a record level of $1.31 trillion. This new spending level was up 7.6% year-on-year and 1.8% from the previous month.

Total nonfarm payroll employment increased by 223,000 in May, and the unemployment rate edged down to 3.8 percent. Employment continued to trend up in several industries, including retail trade, health care, and construction.